Some grim news for investors with Keydata Investment Services has just broken.
On Tuesday afternoon, administrators PricewaterhouseCoopers gave warning that “certain issues” had come to light – issues which mean a sale of the company as a whole may not be possible.
Or to use the less euphemistic language of the FSA:
Today PricewaterhouseCooper (PwC) has announced that as a result of concerns around some Keydata products it has suspended certain interest payments and certain redemption rights. The FSA is now working closely with the administrators to reach a solution for investors as fast as possible and is also in discussions with the Serious Fraud Office about the potentially missing assets underlying some of these products.
If it emerges that Keydata has caused customers to suffer a financial loss and cannot meet its liabilities, the Financial Services Compensation Scheme (FSCS) may be able to help.
The concerns only came to light during PwC’s detailed forensic examination of Keydata’s business and it remains a complex situation.
PwC is also endeavouring to sell as much of Keydata’ business as possible and will continue to run the remainder of the business.
Wow, the SFO! Things must be serious.
For those of you who have not been following this story, Keydata, which has over £3bn in assets under management and specialises in selling structured products through a network of independent financial advisers, was put into administration by the FSA earlier this month.
The move irked some commentators because the UK’S beloved regulator appeared to have tipped the whole company into administration just because some of its individual savings accounts (Isas) were non-compliant. That no longer looks to be the case; in fact, non-compliant Isas look to be the tip of iceberg.
For a full list of the products affected and the statement from PwC click here.
Update:
Citywire is reporting that PwC believes some £103m in assets, which were supposed to be invested in the group’s life settlement products, have gone missing. It also claims David Elias, a one-time porn magnate (now deceased) was involved in structuring some of the bonds.
Related link:
More ‘non-compliant’ Isas found at Keydata – FT